If the federal funds rate were below the level the Federal Reserve had targeted, the Fed could move the rate back towards its target by
a. buying bonds. This buying would reduce reserves.
b. buying bonds. This buying would increase reserves.
c. selling bonds. This selling would reduce reserves.
d. selling bonds. This selling would increase reserves.
c
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Students can rent a Blu-ray movie at Campus Video for $4. As the price of Blu-ray players fall, the
A) quantity supplied of Blu-ray movies will decrease. B) demand for Blu-ray movies will increase. C) supply of Blu-ray movies will decrease. D) quantity demanded of Blu-ray movies will increase.
In the Keynesian model, suppose the Fed sets a target for the real interest rate. If the IS curve shifts down and to the left, and the Fed wants to keep output unchanged in the short run and the price level unchanged in the long run, it will
A) shift the LR curve up. B) not shift the LR curve. C) shift the LR curve down. D) shift the IS curve up and to the right.
Other things the same, if banks decide to hold a smaller part of their deposits as excess reserves, the money supply will fall
a. True b. False Indicate whether the statement is true or false
When economists refer to capital flight, they are speaking of an:
A. outflow of financial capital from a certain country. B. outflow of real capital from a certain country. C. outflow of financial and real capital from a certain country. D. outflow of human capital from a certain country.